AARP and 3 States Are Denied Opportunity to Defend DOL Fiduciary Guidance

In a ruling handed down yesterday, May 2, the U.S. Fifth Circuit Court of Appeals denied motions by the American Association of Retired Persons (AARP) and the attorneys-general of California, New York, and Oregon that they be allowed to intervene in Department of Labor (DOL) fiduciary guidance litigation. In mid-March, the Fifth Circuit Court vacated in its entirety the DOL’s 2016 fiduciary advice regulations and exemptions package, ruling that the DOL had exceeded its authority under ERISA. Defendants—the Department of Labor—had until Monday April 30 to appeal the ruling.

Because the DOL had given no indication of its intent to appeal—given a very much changed DOL position under the current administration—AARP and the states’ attorneys general requested that the Court allow them to intervene, essentially seeking to appeal in the DOL’s stead. The motions filed by AARP and the states also requested an “en banc” rehearing of the case, which would have included all of the Fifth Circuit Appeals Court judges, not just the three that ruled in March to vacate the DOL guidance.

The effective date for the Fifth Circuit Court’s vacating of the DOL fiduciary guidance, which is currently in a relaxed and simplified compliance status, is expected to be on or about May 7. The DOL technically still has the ability to appeal to the U.S. Supreme Court. However, that is considered highly unlikely, given the DOL having foregone the opportunity to appeal at the Fifth Circuit level.